Obama keeps Bush's vast tax cuts for wealthy

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The Independent US

President Barack Obama last night signed into law a sweeping $858bn (£554bn) tax bill that ensures tax-rate cuts introduced by former President George Bush nearly a decade ago will remain in place for another two years, offering a potentially powerful fillip to the flat US economy.

The passage of the law on Capitol Hill was the most dramatic evidence yet that bipartisan compromise has been unexpectedly resurrected in the weeks after November's midterm elections. The deal was largely the one struck by Mr Obama and Republican leaders two weeks ago over the loud objections of his party's liberal wing.

Predictions of gridlock have not come to pass. Nor has the lame-duck session now winding down before the new Congress convenes, with a Republican-controlled House of Representatives, become becalmed as many predicted. If the wind stays behind him, Mr Obama in the last days before Christmas may even see Congress overcome last-minute wobbles on ratifying the new Start treaty with Russia and on ending the "don't ask, don't tell" (DADT) ban on gays openly serving in the military.

"What you are seeing now is what he always wanted to be," Senator Claire McCaskill, a long-time ally of Mr Obama, said. "In his heart, he's a pragmatist, not an ideologue, and he's more comfortable with being able to engage Republicans and not being as divisive."

"This might turn out to be a very good month for the president," said Fred Sainz of the Human Rights Campaign yesterday. "Getting rid of DADT is important not just to the gay community but to progressives as a whole."